Bank insurance executives at a conference here expressed apprehension over proposals that would limit the sharing of customer data.
Since June, roughly 20 state attorneys general have opened investigations into data-sharing practices at some of the nation's largest banks. With pressure mounting to tighten restrictions, bank insurance executives are worried that some legislative proposals could make direct mailings and cross-selling more difficult.
"The privacy matter was what seemed to be more discussed than anything else," said Thomas D. Murry, senior vice president in charge of BancorpSouth's insurance unit, who attended the Association of Banks in Insurance conference last week.
ABI president Glen Milesko made the issue a priority in his opening remarks. "For financial services modernization to make sense, we have to be able to share information to bring the right products to the right customers at the right time."
Lawmakers on Capitol Hill are debating financial reform measures that would eliminate barriers to the selling of insurance by banks.
Last week, the ABI distributed a package of information on privacy issues to the 500 who attended its annual conference. The package included "talking points" and a template for letters to protest aspects of certain proposals.
In a cover letter attached to the package, ABI executive director Kenneth Reynolds said a privacy amendment to H.R. 10 would unfairly discriminate against bank-affiliated agents by requiring commission and fee disclosures that would not apply to independent agents.
Preventing the sharing of even those customer account numbers encoded to shield identity with nonaffiliated parties for mass-marketing "would significantly reduce the present and potential fee income of many financial institutions," Mr. Reynolds wrote.
A standing-room-only session on privacy Wednesday morning featured Office of the Comptroller of the Currency assistant chief counsel Amy S. Friend and ABI general counsel James T. McIntyre.
Though open to all, the session was declared off the record and went unrecorded. This was at the behest of a few audience members, not panel members, said moderator Matthew S. Lievens, a vice president with Wachovia Insurance Services. After rethinking the issue, a repeat session carried no such cloak of secrecy, he said.
BancorpSouth's Mr. Murry said that even though financial services companies may have been singled out for regulation, banks already protect customers.
"The concerns that you hear expressed about the privacy provisions should not give the impression that banks aren't acutely sensitive of their customers' information," Mr. Murry said.
Based on his discussions with bankers at the conference, Mr. Murry said, there's a sense that despite financial modernization discussions, it's time to get on with the nuts and bolts of insurance sales programs.
